How to Pick Quality Shares: A three-step process for selecting profitable stocks
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Description
How to Pick Quality Shares provides a three-step process for analysing company financial information to find good investments: finding quality companies; avoiding dangerous or risky companies; and not paying too much for companies' shares. Applying the in-depth techniques described here will give investors a fuller understanding of how companies really work, and an edge over other investors, including professional investors and analysts.
Phil Oakley, an experienced investment analyst and private investor, guides the reader step-by-step through these three stages:
1. For the first step, he shows how to identify the kind of high-quality companies that are likely to be profitable investments over the long term. Important themes are how much a company earns on the money it invests, reliable measures of profit, and the importance of cash flow.
2. Next, he shows how to spot dangers and risks that can lead to a company that is superficially attractive turning out to be a bad investment. Here the focus is on how to analyse debt, in particular hidden debt and pension fund deficits.
3. Lastly, he shows how to value a company's shares and determine what is a reasonable price to pay to invest in that company. Phil shows why some common shortcuts to valuing shares are unhelpful, and how to use cash profits to value shares more reliably.
No longer is in-depth financial data and analysis the preserve of the City. Private investors have access to all the information they need to make well-informed investment decisions. But still many investors lack the confidence to back their own judgment. How to Pick Quality Shares will give you this confidence - improving your skills and making you a more profitable investor.
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